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Are settlement agreement costs going to increase?

In a recent EAT case, it was stated that the £500 employer contribution to the employee's legal costs in relation to a Settlement Agreement would not be enough to enable her to obtain advice on the merits of her claims and the value of any likely award.
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Are settlement agreement costs going to increase?

Covert CCTV monitoring possible without violating an employee’s Article 8 privacy rights

The European Court of Human Rights (ECHR) has ruled that covert surveillance to tackle workplace theft did not breach an employee’s right to privacy under Article 8 of the European Convention on Human Rights.

What are the facts of the case?

Five supermarket cashiers were dismissed after hidden CCTV cameras captured them stealing. The cameras had been installed as part of an investigation into large stock discrepancies. The employees brought unfair dismissal claims which were rejected by the Spanish courts who found that, although no prior notice of the surveillance had been given (a prerequisite under Spanish law), this was justified by the employer’s reasonable suspicion of theft.

What did the ECHR decide?

The employees appealed to the ECHR, claiming that their Article 8 rights (respect for one’s private life) had been breached by the covert video surveillance.

Initially, the ECHR upheld the claims on the basis that the video surveillance had targeted all staff, rather than particular individuals, without any time limit and that the employees had not been informed of the surveillance in accordance with Spanish domestic law.

The Spanish government then asked for the case to be referred to the Grand Chamber of the ECHR, which overturned the decision and deemed that the employer did not breach the employees’ right to privacy. It commented that there was a balance to strike between private and public interests and considered the following issues:

  • whether the employees had been notified of the possibility of video surveillance;
  • the extent of the monitoring by the employer and the degree of intrusion into the employees’ privacy;
  • whether the employer had provided legitimate reasons to justify monitoring and the extent of those reasons;
  • whether less intrusive methods of monitoring would have been possible;
  • the consequences of the monitoring for the employees; and
  • whether the employees had been provided with appropriate safeguards.

The Grand Chamber of the ECHR found that the prolonged suspicion of theft was a legitimate reason for surveillance. Furthermore, the monitoring took place in a public area and the duration was not excessive. A limited number of people viewed the recordings, which were used solely for the purposes of the investigation. The ECHR recognised that, under Spanish law, notification of surveillance is required. However, it concluded that the severity of the misconduct meant that surveillance without prior notification was in the public interest.

What can employers take from this decision?

This decision shows that it is possible to use covert monitoring in a targeted investigation. However, employers should be wary of viewing this as a green light on all surveillance, given the court’s careful consideration of all the above factors, and should maintain a strict policy that covert surveillance should only be used when the employer believes there is no less intrusive way of tackling the issue. Appropriate safeguards on use of the images should also be established.

Covert CCTV monitoring possible without violating an employee’s Article 8 privacy rights

When can off the record discussions be used in evidence?

Section 111A of the Employment Rights Act 1996 enables "pre-termination negotiations" to take place between an employer and employee to facilitate discussions. Discussions of this sort, also known as "protected conversations" or "PTNs", are inadmissible in any later unfair dismissal proceedings. However, there are exceptions to this protection, including in relation to automatic unfair dismissal cases (such as whistleblowing, among others) and discrimination claims or where there has been "improper behaviour". Where an exception applies the discussions are not protected and are fully disclosable.
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When can off the record discussions be used in evidence?

Could taking action on climate change result in disciplinary action?

Last week, people all over the world took part in mass rallies as part of a global climate change strike. We consider the business impact, and the employees' right to strike.
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Could taking action on climate change result in disciplinary action?

Be more Japanese? Stepping up to manage automation (like Dentons!)

BEIS published a report on automation and the future of work on 18 September 2019. The report signals that a UK fear of having our jobs taken over by robots has already resulted in the UK lagging behind our international competitors when it comes to automation and robot technologies. Japan on the other hand is forging ahead as a market leader. In 2015 the UK had just 10 robots for every million hours worked, compared with 131 in the US, 133 in Germany and 167 in Japan.
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Be more Japanese? Stepping up to manage automation (like Dentons!)

Employee shareholders – is a new contract enough to make them an ordinary employee?

Employee shareholders have always been rare beasts and may be rarer still if a contractual update meant they became ordinary employees again.
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Employee shareholders – is a new contract enough to make them an ordinary employee?

References – to give or not to give?

There is generally no obligation on an employer to give a reference at all.  There are, of course, exceptions – for example, where unusually there is a contractual entitlement to a reference, or the employer risks victimising or discriminating against an employee by not giving one, or there are Financial Conduct Authority or Prudential Regulation Authority requirements which must be met. In some cases it may be said that an employer has a moral obligation to provide a reference. Either way, the employer’s policy on references must be consistent or it could lead to allegations of discrimination.

Who provides a reference?

References can be given on behalf of a business or in a personal capacity. An employer is legally responsible for the contents of a corporate reference because it is provided on its behalf.  It is therefore advisable to have a policy detailing who can give a reference, in what format and what information it can include. To ensure that a personal reference is not taken as a corporate reference, it should not be provided on headed notepaper or include the referee’s job title.

What information should a reference include?

A reference does not have to be positive, but it must be accurate and true. There is generally no requirement as to the content of the reference, but given the potential liabilities it is common (and usually advisable) for employers to simply give a short statement confirming the facts of employment, such as the relevant dates and the employee’s job title. More detailed references could include information such as the individual’s performance, or absence and disciplinary records. However, any comments about performance or absence should not be related to a disability and you should be mindful of data protection obligations and consent requirements. It is often advisable to provide a reference in writing rather than verbally, as there is less possibility of misinterpretation.

What happens if a reference is inaccurate or unfair?

If the subject of a reference believes that it is inaccurate or misleading and has harmed their prospects of future employment, it may be possible for them to sue their former employer for negligent misstatement or even defamation. The individual may also be able to take the employer (and potentially the organisation which is the recipient of the reference) to an employment tribunal if they think that the negative reference is a result of discrimination.

Employers often include disclaimers in a reference to exclude liability to the recipient for any inaccuracies, but disclaimers will only offer protection to the reference giver if they are reasonable.

Data protection 

The provision of a reference will generally involve the processing of personal data by an employer as a data controller and so, as with all personal data processing, will be subject to data protection principles. It is particularly important, when dealing with references, to have regard to data protection requirements when providing information in a reference about an employee’s health record or reasons for periods of absence, as this will be special category personal data for the purposes of the GDPR.

References – to give or not to give?

Government uncovering the cover-up culture

Since #MeToo brought non-disclosure agreements (NDAs) into the spotlight in late 2017, there has been a flurry of activity from government committees and regulatory bodies seeking to implement change. The most recent activity is a government response on proposals to prevent the misuse of confidentiality clauses that was published at the end of last month.
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Government uncovering the cover-up culture

SMCR optimisation and final rules

The Senior Managers and Certification Regime (SMCR), which was introduced in 2016 to increase the accountability of individuals working in the banking sector, will be extended to the wider financial services industry on 9 December 2019. In preparation for this wider remit, the Financial Conduct Authority (FCA) launched a consultation on its proposed changes to “optimise” the regime. Its final policy statement was published on 26 July 2019.

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SMCR optimisation and final rules

Tribunal issues different decisions for different contracts in IR35 ruling

In the case of George Mantides Ltd v. HMRC [2019] TC07202, a personal services company (the Company) appealed against tax and NIC assessments under the IR35 rules. The First Tier Tribunal (FTT) determined that there were sufficient differences between two engagements for the provision of services for IR35 to apply to one engagement and not the other.

The Company was providing the services of its director, George Mantides, to two hospitals – Royal Berkshire Hospital (Royal) and Medway Maritime Hospital (Medway). At both hospitals, Mr Mantides was a locum urologist. He saw patients according to a rota, ordered and reviewed x-rays, carried out minor surgical procedures and used facilities and equipment provided by the hospitals. Mr Mantides had sufficient expertise to carry out the work with minimal direct supervision and was only required to attend one regular meeting. Both engagements were for a consecutive period of three months, although both were terminated early. There were no agreed provisions for sickness, pension, holiday pay or travel expenses – other than between sites. The Company invoiced hourly and paid for professional indemnity insurance.

In its judgment, the FTT noted the following decisive factors:

• Substitutes: The Company had a written contract with Medway detailing the right to supply a suitably qualified substitute for Mr Mantides. Medway had no right of veto over this. In contrast, there was no written contract between the Company and Royal. The “Locum Booking Confirmations” provided in relation to this engagement made no mention of substitutes.

• Notice: The contract between the Company and Medway could be terminated on one day’s notice. The FTT inferred a requirement of one week’s notice from Mr Mantides’ comments about holiday absences at Royal.

• Hours: Medway was under no obligation to provide Mr Mantides with any hours. The FTT inferred (referring to the Locum Booking Confirmation documentation) that Royal would endeavour to provide Mr Mantides with 30-40 hours of work each week.

Under IR35, it is necessary to consider the terms of a hypothetical contract between the worker and the end client. The question was whether, under each of these hypothetical contracts, Mr Mantides would be considered employed by the relevant hospital or self-employed. The court held that the hypothetical contract with Royal had the characteristics of employment, and the hypothetical contract with Medway, self-employment. Consequently, the Medway contract was not caught by IR35, but the Royal contract was. This case provides an important illustration of some of the factors which will be considered by a court or tribunal in determining the scope of IR35. In this case, it worked in Medway’s favour that there was an express contract detailing the terms of engagement more specifically than the documentation detailing the relationship between the Company and Royal.

Tribunal issues different decisions for different contracts in IR35 ruling